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has not had difficulty obtaining financing for expansion and does not
foresee any future difficulties in obtaining necessary funding for
legitimate purposes.
The company has paid a consistently good dividend to the
stockholders. The president would like to continue this policy in the
future.
DEPARTMENT STRUCTURE
Fantastic, Inc. has two separate production departments - one for each
of the paint types. Since the end products are not distinguishable, the
company uses process costing employing a FIFO inventory.
Absorption costing is used for all outside reports. All non-direct fixed
costs are allocated using various allocation bases as indicated
throughout the project. The Company does not use a full ABC costing
system; however, it does employee some of the ABC concepts in the
budgeting process.
The administrative department handles all of the purchasing,
accounting, and secretarial duties in a highly efficient manner. The
need for separate departments is not necessary at this time.
2005 INFORMATION
SUPER STUPENDOUS
DEPARTMENT DEPARTMENT
Number of machines available 26 20
Annual capacity per machine 15,000 gallons 15,000 gallons
Annual production capacity 390,000 gallons 300,000 gallons
Machine hours available per machine 1,800 hours 1,800 hours
Standard machine hour per gallon .12 hour/gallon .12 hour/gallon
Standard labor hour per machine hour 1.25 labor hr/mach.hr 1.25
labor hr/mach.hr